Cancelling a transaction

Q: I want to sell a piece of land. Total price agreed by both is 1.5 million. 33% he will give in advance and the rest within 6 months, then only I will hand over land papers and land to him. If purchaser fails to give me 67% within these 6 months I will forfeit 33% amount. Now my question is whether this clause is halaal for me (forfeiting the initial deposit)?

A: If you both mutually agree before transacting that if the purchaser does not pay the outstanding amount within six months, the transaction will automatically be cancelled, then this will be permissible. However after the transaction is cancelled it will be compulsory upon you to return the entire amount to the purchaser (i.e. whatever amount he paid you). Attaching the clause of forfeiting the 33% and not returning it to the purchaser in the case of cancellation is an impermissible and invalid clause in Islam. This money will be regarded as interest. Hence it will be haraam for you not to return the money (33%) to the purchaser.